(Kitco News) – A new G20-commissioned report is proposing that the IMF sell off some of its massive “hoard of gold” at these historically high prices and use the proceeds to help pay off the crippling debt being carried by African countries.
The report was presented to South African President Cyril Ramaphosa on Tuesday, who welcomed the proposal ahead of the first G20 summit in Africa, which will bring around 20 heads of state to Johannesburg this coming weekend.
“Globally, more than 3.4 billion people live in countries which spend more on servicing debt than on education or healthcare,” the report stated. “Governments are literally defaulting on development in order to honour their debt obligations.”
The expert report cited recent figures that show public debt in developing countries surpassed $31 trillion in 2024, and suggested that the G20 work with the IMF and the World Bank to create a debt refinancing plan for low-income and economically vulnerable countries.
Trevor Manuel, former finance minister of South Africa and the head of the Africa Expert Panel, said one way to finance such a plan would be to sell some of the tens of millions of ounces of gold held by the IMF. He noted that the IMF’s massive gold reserve is still being held on the books at its historic price of $50 per ounce, even though gold currently trades above $4,100 per ounce.
Manuel is calling for the creation of a transparent mechanism for the sale of some of this resource to fund countries in debt distress. “There's a lot of detail that can and should be worked out, but it's a solution staring us in the face that doesn't have to cost money,” he said.
“It's good to hear... that there is a hoard of gold in the IMF,” Ramaphosa said after accepting the report. “This is the type of resource that can be made available to deal in part to either guaranteeing, financing the debt of many countries in the Global South.”
President Ramaphosa also welcomed proposals for a so-called ‘Borrowers' Club’ of lenders to share best practices, and a review of IMF and World Bank lending frameworks.
The report also urges credit rating agencies to reveal the metrics they use to assess risk to address concerns they may be unfairly discriminating against African countries.
South Africa currently holds the rotating presidency of the Group of 20 leading economies which meets annually to discuss issues of global growth, development and financial stability.
